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Legal capacity is a quality denoting either the legal
aptitude An aptitude is a component of a competence to do a certain kind of work at a certain level. Outstanding aptitude can be considered "talent". Aptitude is inborn potential to perform certain kinds of activities, whether physical or mental, and ...
of a
person A person ( : people) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of social relations such as kinship, ownership of prope ...
to have rights and liabilities (in this sense also called transaction capacity), or altogether the
personhood Personhood or personality is the status of being a person. Defining personhood is a controversial topic in philosophy and law and is closely tied with legal and political concepts of citizenship, equality, and liberty. According to law, only a l ...
itself in regard to an entity other than a
natural person In jurisprudence, a natural person (also physical person in some Commonwealth countries, or natural entity) is a person (in legal meaning, i.e., one who has its own legal personality) that is an individual human being, distinguished from the b ...
(in this sense also called legal personality).


Natural persons

Capacity covers day-to-day decisions, including: what to wear and what to buy, as well as, life-changing decisions, such as: whether to move into a care home or whether to have major surgery. As an aspect of the
social contract In moral and political philosophy, the social contract is a theory or model that originated during the Age of Enlightenment and usually, although not always, concerns the legitimacy of the authority of the state over the individual. Social ...
between a state and its
citizen Citizenship is a "relationship between an individual and a state to which the individual owes allegiance and in turn is entitled to its protection". Each state determines the conditions under which it will recognize persons as its citizens, and ...
s, the state adopts a role of protector to the weaker and more vulnerable members of society. In
public policy Public policy is an institutionalized proposal or a decided set of elements like laws, regulations, guidelines, and actions to solve or address relevant and real-world problems, guided by a conception and often implemented by programs. Public ...
terms, this is the policy of '' parens patriae''. Similarly, the state has a direct social and economic interest in promoting trade, so it will define the forms of business enterprise that may operate within its territory, and lay down rules that will allow both the businesses and those that wish to contract with them a fair opportunity to gain value. This system worked well until social and commercial mobility increased. Now persons routinely trade and travel across state boundaries (both physically and electronically), so the need is to provide stability across state lines given that laws differ from one state to the next. Thus, once defined by the personal law, persons take their capacity with them like a passport whether or however they may travel. In this way, a person will not gain or lose capacity depending on the accident of the local laws, e.g. if A does not have capacity to marry her cousin under her personal law (a rule of
consanguinity Consanguinity ("blood relation", from Latin '' consanguinitas'') is the characteristic of having a kinship with another person (being descended from a common ancestor). Many jurisdictions have laws prohibiting people who are related by blood fr ...
), she cannot evade that law by travelling to a state that does permit such a marriage (see nullity). In Saskatchewan Canada, an exception to this law allows married persons to become the common law spouse of other(s) prior to divorcing the first spouse. This law is not honored amongst other Canadian provinces.


Legal capacity

Standardized classes of person have had their freedom restricted. These limitations are exceptions to the general policy of
freedom of contract Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...
and the detailed
human Humans (''Homo sapiens'') are the most abundant and widespread species of primate, characterized by bipedalism and exceptional cognitive skills due to a large and complex brain. This has enabled the development of advanced tools, cultu ...
and
civil rights Civil and political rights are a class of rights that protect individuals' freedom from infringement by governments, social organizations, and private individuals. They ensure one's entitlement to participate in the civil and political life ...
that a person of ordinary capacity might enjoy. For example, freedom of movement may be modified, the
right to vote Suffrage, political franchise, or simply franchise, is the right to vote in public, political elections and referendums (although the term is sometimes used for any right to vote). In some languages, and occasionally in English, the right to v ...
may be withdrawn, etc. As societies have developed more equal treatment based on gender, race and ethnicity, many of the older incapacities have been removed. For example,
English law English law is the common law legal system of England and Wales, comprising mainly criminal law and civil law, each branch having its own courts and procedures. Principal elements of English law Although the common law has, historically, b ...
used to treat married women as lacking the capacity to own property or act independently of their husbands (the last of these rules was repealed by the
Domicile and Matrimonial Proceedings Act 1973 Domicile is relevant to an individual's "personal law," which includes the law that governs a person's status and their property. It is independent of a person's nationality. Although a domicile may change from time to time, a person has only one ...
, which removed the wife's domicile of dependency for those marrying after 1974, so that a husband and wife could have different domiciles).


Minors

The definition of an ''infant'' or ''minor'' varies, each state reflecting local
culture Culture () is an umbrella term which encompasses the social behavior, institutions, and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups ...
and
prejudice Prejudice can be an affective feeling towards a person based on their perceived group membership. The word is often used to refer to a preconceived (usually unfavourable) evaluation or classification of another person based on that person's per ...
s in defining the
age of majority The age of majority is the threshold of legal adulthood as recognized or declared in law. It is the moment when minors cease to be considered such and assume legal control over their persons, actions, and decisions, thus terminating the contr ...
,
marriageable age Marriageable age (or marriage age) is the general age, as a legal age or as the minimum age subject to parental, religious or other forms of social approval, at which a person is legitimately allowed for marriage. Age and other prerequisites t ...
,
voting age A voting age is a minimum age established by law that a person must attain before they become eligible to vote in a public election. The most common voting age is 18 years; however, voting ages as low as 16 and as high as 25 currently exist ( ...
, etc. In many
jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. J ...
s, legal
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
s, in which (at least) one of the contracting parties is a minor, are voidable by the minor. For a minor to undergo
medical procedure A medical procedure is a course of action intended to achieve a result in the delivery of healthcare. A medical procedure with the intention of determining, measuring, or diagnosing a patient condition or parameter is also called a medical test. ...
,
consent Consent occurs when one person voluntarily agrees to the proposal or desires of another. It is a term of common speech, with specific definitions as used in such fields as the law, medicine, research, and sexual relationships. Consent as und ...
is determined by the minor's parent(s) or
legal guardian A legal guardian is a person who has been appointed by a court or otherwise has the legal authority (and the corresponding duty) to make decisions relevant to the personal and property interests of another person who is deemed incompetent, call ...
(s). The right to vote in the United States is currently set at 18 years, while the right to buy and consume
alcohol Alcohol most commonly refers to: * Alcohol (chemistry), an organic compound in which a hydroxyl group is bound to a carbon atom * Alcohol (drug), an intoxicant found in alcoholic drinks Alcohol may also refer to: Chemicals * Ethanol, one of sev ...
is often set at 21 years by U.S.
state law State law refers to the law of a federated state, as distinguished from the law of the federation A federation (also known as a federal state) is a political entity characterized by a union of partially self-governing provinces, states, o ...
. Some laws, such as marriage laws, may differentiate between the sexes and allow women to marry at a younger age. There are instances in which a person may be able to gain capacity earlier than the prescribed time through a process of
emancipation Emancipation generally means to free a person from a previous restraint or legal disability. More broadly, it is also used for efforts to procure economic and social rights, political rights or equality, often for a specifically disenfranch ...
. Conversely, many states allow the inexperience of childhood to be an excusing condition to criminal liability and set the
age of criminal responsibility The age of criminal responsibility is the age below which a child is deemed incapable of having committed a criminal offence. In legal terms, it is referred to as a defence/defense of infancy, which is a form of defense known as an excuse so tha ...
to match the local experience of emerging behavioral problems (see ''
doli incapax Doli may refer to: * Doli (character), recurring character in Lloyd Alexander's fantasy series ''The Chronicles of Prydain'' * Doli (musical instrument), a type of drum * Doli, Croatia, a village near Dubrovnik, Croatia * Doli (vehicle), a type ...
''). For sexual crimes, the
age of consent The age of consent is the age at which a person is considered to be legally competent to consent to sexual acts. Consequently, an adult who engages in sexual activity with a person younger than the age of consent is unable to legally cla ...
determines the potential liability of
adult An adult is a human or other animal that has reached full growth. In human context, the term ''adult'' has meanings associated with social and legal concepts. In contrast to a " minor", a legal adult is a person who has attained the age of maj ...
accused. As an example of liability in contract, the law in most of Canada provides that an infant is not bound by the contracts he or she enters into except for the purchase of necessaries and for beneficial contracts of service. Infants must pay fair price only for necessary goods and services. However, the
British Columbia British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, for ...
''Infants Act'' ( 1996 c.223) declares all contracts, including necessities and beneficial contracts of service, are unenforceable against an infant. Only student loans and other contracts made specifically enforceable by statute will be binding on infants in that province. In contracts between an adult and an infant, adults are bound but infants may escape contracts at their option (i.e. the contract is voidable). Infants may ratify a contract on reaching age of majority. In the case of executed contracts, when the infant has obtained some benefit under the contract, he/she cannot avoid obligations unless what was obtained was of no value. Upon repudiation of a contract, either party can apply to the court. The court may order restitution, damages, or discharge the contract. All contracts involving the transfer of real estate are considered valid until ruled otherwise. A minor (typically under 18) can disaffirm a contract made, no matter the case. However, the entire contract must be disaffirmed. Depending on the jurisdiction, the minor may be required to return any of the goods still in his possession. Also,
barter In trade, barter (derived from ''baretor'') is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists disti ...
transactions such as purchasing a
retail Retail is the sale of goods and Service (economics), services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturing, manufacturers, dire ...
item in exchange for a cash payment are generally recognized through a
legal fiction A legal fiction is a fact assumed or created by courts, which is then used in order to help reach a decision or to apply a legal rule. The concept is used almost exclusively in common law jurisdictions, particularly in England and Wales. Deve ...
not to be contracts due to the absence of promises of future action. A minor may not disavow such a trade. *Disaffirmance – it must be timely. For example, a contract that goes beyond two years of reaching the age of majority would be considered ratified. Minors are still allowed to disaffirm, even if their age is misrepresented. They will not face tort violations. Some states don't allow disaffirmance if the consideration cannot be returned. *Obligations – most states hold that a minor only must return the goods (consideration) if the goods are still in the minor’s possession. Many states are requiring that the minor restore the adult (other party) to the state they were in before the contract was made. Minors are beginning to be held responsible for damages, wear, tear, etc. of the good in question upon return. A suit for tort is considered by some states to be an enforcement of the contract and is not allowed. *Liability – for necessities, (1) the item contracted for must be necessary for minor’s existence, (2) the value must be up to that of the current
standard of living Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...
or financial/social status (not excessive in value), (3) the minor must not be under the care of a parent/guardian who is required to supply the item. A minor could be held liable for a contract for the purchase of luxury items (those that are not in the financial/social/standard of living range). *Ratification – accepting and giving legal force to an obligation. Express ratification (for a minor) is expressly stating, orally or in writing that he/she intends to be bound by the contract. Implied ratification is when the conduct of the minor is inconsistent with that of disaffirmance or when minor fails to disaffirm an executed contract within a reasonable period. Generally, the courts base their determination on whether the minor, after reaching the age of majority, has had ample opportunity to consider the nature of the contractual obligations he or she entered into as a minor and the extent to which the adult party to the contract has performed. As one court put it, "the purpose of the infancy doctrine is to protect 'minors from foolishly squandering their wealth through improvident contracts with crafty adults who would take advantage of them in the marketplace.'" In
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
, while individuals under the age of 21 are regarded as minors, sections 35 and 36 of the Civil Law Act 1909 provide that certain contracts entered into by minors aged 18 and above are to be treated as though they were adults. Additionally, the Minors' Contracts Act 1987 as applicable in Singapore and in
England and Wales England and Wales () is one of the three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. The substantive law of the jurisdiction is En ...
provides that a contract entered into by a minor is not automatically unenforceable and that a "court may, if it is just and equitable to do so, require the inordefendant to transfer to the plaintiff any property acquired by the defendant under the contract, or any property representing it".


Bankruptcy

If individuals find themselves in a situation where they can no longer pay their debts, they lose their status as credit-worthy and become bankrupt. States differ on the means whereby their outstanding liabilities can be treated as discharged and on the precise extent of the limits that are placed on their capacities during this time but, after discharge, they are returned to full capacity. In the United States, some states have spendthrift laws under which an irresponsible spender may be deemed to lack capacity to enter into contracts (in Europe, these are termed prodigality laws) and both sets of laws may be denied extraterritorial effect under public policy as imposing a potentially penal status on the individuals affected.


Enemy aliens and/or terrorists

During times of war or civil strife, a state will limit the ability of its citizens to offer help or assistance in any form to those who are acting against the interests of the state. Hence, all commercial and other contracts with the "enemy", including terrorists, would be considered void or suspended until a cessation of hostilities is agreed.


Mental capacity


Insanity, mental illness, or mental/medical condition

Loss of mental capacity occurs in individuals may have an inherent physical condition that prevents them from achieving the normal levels of performance expected from persons of comparable age, or their inability to match current levels of performance may be caused by contracting an illness. Whatever the cause, if the resulting condition is such that individuals cannot care for themselves, or may act in ways that are against their interests, those persons are vulnerable through dependency and require the protection of the state against the risks of abuse or exploitation. Hence, any agreements that were made are voidable, and a court may declare that person a ward of the state and grant
power of attorney A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs (which may be financial or regarding health and welfare), business, or some other legal matter. The person auth ...
to an appointed
legal guardian A legal guardian is a person who has been appointed by a court or otherwise has the legal authority (and the corresponding duty) to make decisions relevant to the personal and property interests of another person who is deemed incompetent, call ...
. The UK's
Mental Capacity Act 2005 The Mental Capacity Act 2005 (c 9) is an Act of the Parliament of the United Kingdom applying to England and Wales. Its primary purpose is to provide a legal framework for acting and making decisions on behalf of adults who lack the capacity ...
or MCA sets out a two-stage test of capacity: # Is the person unable to make a particular decision? # Is the inability to make a decision caused by an impairment of, or disturbance in the functioning of, a person's mind or brain? The MCA states an individual is unable to make their own decision, if they are unable to do at least one of four things: # Understand information given to them. # Retain that information long enough to be able to make the decision. # Weigh up the information available to make the decision. # Communicate their decision. In England and Wales, this is a specific function of the
Court of Protection The Court of Protection in English law is a superior court of record created under the Mental Capacity Act 2005. It has jurisdiction over the property, financial affairs and personal welfare of people who lack mental capacity to make decisi ...
, and all matters concerning persons who have lost, or expect soon to lose, mental capacity are regulated under the
Mental Capacity Act 2005 The Mental Capacity Act 2005 (c 9) is an Act of the Parliament of the United Kingdom applying to England and Wales. Its primary purpose is to provide a legal framework for acting and making decisions on behalf of adults who lack the capacity ...
. This makes provision for lasting powers of attorney under which decisions about the health, welfare, and financial assets of a person who has lost capacity may be dealt with in that person's interests. In Ireland, the Assisted Decision-Making (Capacity) Act was passed in 2015. This Act addresses the capacity of people with intellectual disabilities. The general principles are set out in section 8 of the Act. Under Singapore's Mental Capacity Act 2008, "a person lacks capacity in relation to a matter if at the material time the person is unable to make a decision for himself or herself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain". Where an individual lacks capacity on grounds of mental illness or senility, a relative or other responsible person may obtain a lasting
power of attorney A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs (which may be financial or regarding health and welfare), business, or some other legal matter. The person auth ...
to make decisions concerning the "personal welfare" of the person lacking capacity, the "property and inancialaffairs" of the person, or both. Questions as to whether an individual has the capacity to make decisions either generally or with regard to a particular matter or class of matters are generally resolved by a judicial declaration and the court making the declaration may appoint one or more individuals to act as deputies for the person lacking capacity.Part 5 of the Mental Capacity Act 2008 (Singapore)
This sort of problem sometimes arises when people suffer some form of medical problem such as unconsciousness, coma
, extensive paralysis, or delirious states, from accidents or illnesses such as strokes, or often when older people become afflicted with some form of medical/mental disability such as Huntington's disease,
Alzheimer's disease Alzheimer's disease (AD) is a neurodegenerative disease that usually starts slowly and progressively worsens. It is the cause of 60–70% of cases of dementia. The most common early symptom is difficulty in remembering recent events. As ...
,
Lewy body Lewy bodies are the inclusion bodies – abnormal aggregations of protein – that develop inside nerve cells affected by Parkinson's disease (PD), the Lewy body dementias (Parkinson's disease dementia and dementia with Lewy bodies (DLB)), and ...
disease, or similar dementia. Such persons are often unable to consent to medical treatment but otherwise handle their financial and other personal matters. If the afflicted person has prepared documents beforehand about what to do in such cases, often in a revocable living trust or related documents, then the named legal guardian may be able to take over their financial and other affairs. If the afflicted person owns their property jointly with a spouse or other able person, the able person may be able to take over many of the routine financial affairs. Otherwise, it is often necessary to petition a court, such as a
probate court A probate court (sometimes called a surrogate court) is a court that has competence in a jurisdiction to deal with matters of probate and the administration of estates. In some jurisdictions, such courts may be referred to as Orphans' Courts o ...
, that the afflicted person lacks legal capacity and allow a legal guardian to take over their financial and personal affairs. Procedures and court review have been established, dependent on the area of jurisdiction, to prevent exploitation of the incapacitated person by the guardian. The guardian periodically provides a financial accounting for court review. In the
Criminal Law Criminal law is the body of law that relates to crime. It prescribes conduct perceived as threatening, harmful, or otherwise endangering to the property, health, safety, and moral welfare of people inclusive of one's self. Most criminal law ...
, the traditional common law M'Naghten Rules
excuse In jurisprudence, an excuse is a defense to criminal charges that is distinct from an exculpation. Justification and excuse are different defenses in a criminal case (See Justification and excuse).Criminal Law Cases and Materials, 7th ed. 201 ...
d all persons from liability if they did not understand what they were doing or if they did, that they did not know it was wrong. The consequences of this excuse were that those accused were detained indefinitely or until the medical authorities certified that it was safe to release them back into the community. This consequence was felt to be too draconian, and so statutes have introduced new defenses that will limit or reduce the liability of those accused of committing offenses if they were suffering from a mental illness at the relevant time (see the
insanity Insanity, madness, lunacy, and craziness are behaviors performed by certain abnormal mental or behavioral patterns. Insanity can be manifest as violations of societal norms, including a person or persons becoming a danger to themselves or t ...
and
mental disorder A mental disorder, also referred to as a mental illness or psychiatric disorder, is a behavioral or mental pattern that causes significant distress or impairment of personal functioning. Such features may be persistent, relapsing and remitti ...
defenses).


Intoxication

Although individuals may have consumed a sufficient quantity of intoxicant or drug to reduce or eliminate their ability to understand exactly what they are doing, such conditions are self-induced and so the law does not generally allow any defense or excuse to be raised to any actions taken while incapacitated. The most generous states do permit individuals to repudiate agreements as soon as sober, but the conditions to exercising this right are strict.


Business entities


General and limited partnerships

There is a clear division between the approach of states to the definition of partnerships. One group of states treats
general A general officer is an officer of high rank in the armies, and in some nations' air forces, space forces, and marines or naval infantry. In some usages the term "general officer" refers to a rank above colonel."general, adj. and n.". O ...
and limited partnerships as aggregate. In terms of capacity, this means that they are no more than the sum of the natural persons who conduct the business. The other group of states allows partnerships to have a separate legal personality which changes the capacity of the "firm" and those who conduct its business and makes such partnerships more like corporations.


Juridical persons


Corporations

The extent of an
juridical person A juridical person is a non-human legal person that is not a single natural person but an organization recognized by law as a fictitious person such as a corporation, government agency, NGO or International (inter-governmental) Organization (suc ...
's capacity depends on the law of the place of incorporation and the enabling provisions included in the constitutive documents of incorporation. The general rule is that anything not included in the corporation's capacity, whether expressly or by implication, is ''
ultra vires ('beyond the powers') is a Latin phrase used in law to describe an act which requires legal authority but is done without it. Its opposite, an act done under proper authority, is ('within the powers'). Acts that are may equivalently be termed ...
'', i.e. "beyond the power" of the corporation, and so may be unenforceable by the corporation, but the rights and interests of innocent third parties dealing with the corporations are usually protected.


Trade unions

In some states,
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ...
s have limited capacity unless any contract made relates to union activities.


Insolvent business entities

When a business entity becomes
insolvent In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet in ...
, an
administrator Administrator or admin may refer to: Job roles Computing and internet * Database administrator, a person who is responsible for the environmental aspects of a database * Forum administrator, one who oversees discussions on an Internet forum * N ...
, receiver, or other similar legal functionary may be appointed to determine whether the entity shall continue to trade or be sold so that the creditors may receive all or a proportion of the money owing to them. During this time, the capacity of the entity is limited so that its liabilities are not increased unreasonably and to the detriment of the existing creditors.


See also

*
Capacity in English law Capacity in English law refers to the ability of a contracting party to enter into legally binding relations. If a party does not have the capacity to do so, then subsequent contracts may be invalid; however, in the interests of certainty, ther ...


References

{{Authority control Conflict of laws Contract law Rights Legal doctrines and principles